Facts: Encroacher plants pistachio trees on land owned by another, knowing there was an “issue” regarding ownership of the property

The Hansen family owned 382 acres of farmland in Tulare County. The neighboring property consisting of 250 acres was owned by Valov, who later sold to Sandridge Partners, L.P.

A 10 acre area of the Valov/Sandridge property was known as the “Disputed Land.”

The Hansen family farmed their property for several decades — primarily cotton, alfalfa, and wheat. Those crops were planted on the Hansen property and the Disputed Land owned by Valov (and later Sandridge). The Hansens’ farming operations were not a secret — the work involved tractors, planters, cultivators, swathers, bailers, graders, and other equipment and personnel.

In 2011, the Hansens decided to plant pistachio trees on the Disputed Land. Internally, the Hansen family discussed that there was a “lot line issue” regarding the Disputed Land that needed to be worked out with Valov, who by then was in talks to sell his property to Sandridge. The Hansens and Valov had some preliminary discussion regarding the Disputed Land, but came to no resolution. The Hansens continued discussions with Sandridge while Sandridge was in contract to buy Valov’s land, and the parties vaguely resolved to “take care of” the lot line issue in some way.

Without reaching any agreement, the Hansens prepared portions of their property and the Disputed Land for the pistachio trees — work that included deep ripping and installing a drip irrigation system — and planted the trees in June 2012.

Valov’s sale to Sandridge closed in December 2012. Further negotiations between the Hansens and Sandridge failed, and the Hansens sued for a “prescriptive easement” to continue using the Disputed Land.

Trial court’s judgment: equitable easement granted

The trial court denied the Hansens’ request for a prescriptive easement, but granted the Hansens an equitable easement. Under the terms of the equitable easement, the Hansens would have to pay Sandridge the fair market value of the unimproved Disputed Land, and the easement would terminate when the Hansens stopped farming the Disputed Land for one year or when the pistachio trees were no longer commercially viable.

The trial court found that the Hansens were entitled to the equitable easement on the Disputed Land because their planting of pistachio trees “was not an intentional or negligent encroachment.”

Court of Appeal’s opinion: no equitable easement because encroachment was negligent, not innocent

The Court of Appeal reversed the trial court’s judgment, holding that “while there is evidence the Hansens’ encroachment was not intentional, the evidence does not support the trial court’s conclusion that the encroachment was not negligent.”

In short, the court found that the Hansens plainly knew before they planted the pistachio trees on the Disputed Land that there was a “lot line issue” that needed to be resolved. The court held:

Indeed, if that conduct does not constitute a negligent encroachment, it is hard to imagine what would. While growers do not have a general duty to survey or otherwise confirm boundaries before planting, it is negligent to plant permanent crops on a swath of land, knowing that some unspecified part of that land is in need of a lot line adjustment.

The court ruled that “such willful ignorance should not be condoned, and certainly not rewarded.”

Lesson(s)

To qualify for an equitable easement, someone encroaching on property owned by another must be “innocent” — i.e., the encroachment must not only be unintentional, but also not negligent. When an encroacher is well aware that there is an “issue” regarding ownership of the property being encroached on, “innocence” will be a tough sell.

The Hansen opinion has a second lesson too — this one regarding prescriptive easements (the relief initially sought by the Hansens). That will be addressed in the next Money and Dirt post.